concept of Zero Based Budgeting (ZBB) Method

Concept of Zero Based Budgeting (ZBB) Method is a method of budgeting in which all expenses must be justified for each new period. Zero-based budgeting starts from a “zero base” and every function within an organization is analyzed for needs and costs. Then budgets are built according to what is needed for the upcoming period, regardless of whether the budget is higher or lower than the previous one.

Zero Based Budgeting (ZBB):

Zero Based Budgeting (ZBB): Learning Objective of the article: Define and explain the term “zero based budgeting” and “incremental budgeting” in managerial accounting. Explain the importance and use of zero based budgeting in business. What are advantages and disadvantages of zero based budgeting? Contents: